SOURCE: Varian Semiconductor

Varian Semiconductor

April 28, 2011 16:15 ET

Varian Semiconductor Equipment Associates Reports Fiscal 2011 Second Quarter Results

GLOUCESTER, MA--(Marketwire - Apr 28, 2011) - Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ: VSEA) today announced results for its fiscal year 2011 second quarter ended April 1, 2011.

Revenue for the second quarter of fiscal year 2011 totaled $330.0 million, compared to revenue of $204.0 million for the same period a year ago. Varian Semiconductor recorded net income of $82.3 million, or $1.07 per diluted share during the second quarter of fiscal year 2011, compared to net income of $38.6 million, or $0.51 per diluted share for the same period a year ago.

Gary Dickerson, chief executive officer of Varian Semiconductor, said, "We are increasingly optimistic about our growth potential in 2011 and beyond. In 2010, we developed new implant applications for semiconductor doping and physical materials modification. Our Solion implant product also continues to gain traction with solar cell manufacturers." Dickerson added, "We continue to commit significant research and development and marketing resources to the development of new products and markets that leverage our core technology."

Bob Halliday, chief financial officer, provided forward guidance for the third quarter of fiscal year 2011, "In the second quarter of fiscal year 2011, we reported our highest quarterly revenues, operating margins, net income and earnings per share. Our revenues of $330.0 million exceeded our guidance and our earnings per share of $1.07 were at the high end of our guidance. Third quarter revenue is expected to be between $323.0 and $333.0 million and earnings per share are anticipated to range from $0.97 to $1.02."

Varian Semiconductor will hold a conference call, broadcast over the Internet, at 5:30 p.m. Eastern time today to discuss Varian Semiconductor's operating results and outlook. Access to the call is available through the investor relations page on Varian Semiconductor's website at www.vsea.com. Replays will be available via the website for two weeks after the call.

About Varian Semiconductor Equipment Associates, Inc.

Varian Semiconductor is a leading supplier of ion implantation equipment used in the fabrication of semiconductor chips. Varian Semiconductor's products are used by chip manufacturers worldwide to produce high-performance semiconductor devices. Customers have made Varian Semiconductor the market leader in ion implant because of its architecturally superior products that lower their costs and improve their productivity.

Varian Semiconductor provides support, training, and after-market products and services that help its customers to obtain high utilization and productivity, reduce operating costs, and extend capital productivity of customer investments through multiple product generations. Varian Semiconductor has ranked #1 in the VLSI Research Customer Satisfaction Survey 13 times over the last 14 years. Varian Semiconductor operates globally and is headquartered in Gloucester, Massachusetts. More information can be found on Varian Semiconductor's web site at www.vsea.com. The information contained in Varian Semiconductor's website is not incorporated by reference into this release, and the website address is included in this release as an inactive textual reference only.

Note: This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. For this purpose, statements concerning Varian Semiconductor's customer demand, business opportunities, guidance for third quarter fiscal 2011 revenue, earnings per diluted share, financial performance and any statements using the terms "believes," "anticipates," "will," "expects," "plans" or similar expressions, are forward-looking statements. The forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: volatility in the semiconductor equipment industry; intense competition in the semiconductor equipment industry; Varian Semiconductor's dependence on a small number of customers; fluctuations in Varian Semiconductor's quarterly operating results; market adoption of Varian Semiconductor's new products, such as the Solion implant product; Varian Semiconductor's exposure to risks of operating internationally; uncertain protection of Varian Semiconductor's patent and other proprietary rights; Varian Semiconductor's reliance on a limited group of suppliers; Varian Semiconductor's ability to manage potential growth, decline and strategic transactions; Varian Semiconductor's reliance on one primary manufacturing facility; and Varian Semiconductor's dependence on certain key personnel and Varian Semiconductor's spending on research and development and marketing and the impact of such spending on product development and sales. These and other important risk factors that may affect actual results are discussed in detail under the caption "Risk Factors" in Varian Semiconductor's Annual Report on Form 10-K for the fiscal year ended October 1, 2010 and in other reports filed by Varian Semiconductor with the Securities and Exchange Commission. Varian Semiconductor cannot guarantee any future results, levels of activity, performance or achievement. Varian Semiconductor undertakes no obligation to update any of the forward-looking statements after the date of this release.

              VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
                    CONSOLIDATED STATEMENTS OF INCOME
                 (In thousands, except per share amounts)
                                (unaudited)


                                 Three Months Ended     Six Months Ended
                                --------------------  --------------------
                                April 1,   April 2,   April 1,   April 2,
                                  2011       2010       2011       2010
                                ---------  ---------  ---------  ---------
Revenue
  Product                       $ 313,096  $ 191,282  $ 572,664  $ 318,743
  Service                          16,925     12,675     39,938     26,482
                                ---------  ---------  ---------  ---------
    Total revenue                 330,021    203,957    612,602    345,225

Cost of revenue                   168,250    104,117    311,881    176,698
                                ---------  ---------  ---------  ---------
Gross profit                      161,771     99,840    300,721    168,527
                                ---------  ---------  ---------  ---------
Operating expenses
   Research, development and
    engineering                    29,787     24,346     56,411     46,074
   Marketing, general and
    administrative                 36,760     31,950     70,277     58,053
                                ---------  ---------  ---------  ---------
      Total operating expenses     66,547     56,296    126,688    104,127
                                ---------  ---------  ---------  ---------
      Operating income             95,224     43,544    174,033     64,400

Interest income, net                  780        902      1,483      1,767
Other expense, net                   (382)      (460)      (400)      (964)
                                ---------  ---------  ---------  ---------
Income before income taxes         95,622     43,986    175,116     65,203
Provision for income taxes         13,279      5,393     20,919      9,988
                                ---------  ---------  ---------  ---------
Net income                      $  82,343  $  38,593  $ 154,197  $  55,215
                                =========  =========  =========  =========

Weighted average shares
 outstanding - basic               75,409     74,407     74,837     74,053
Weighted average shares
 outstanding - diluted             76,606     75,331     75,955     75,048

Net income per share - basic    $    1.09  $    0.52  $    2.06  $    0.75
Net income per share - diluted  $    1.07  $    0.51  $    2.03  $    0.74




               VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
                         CONSOLIDATED BALANCE SHEETS
                               (In thousands)

                                                    April 1,    October 1,
                                                      2011         2010
                                                  -----------  -----------
                                                  (unaudited)
                        ASSETS
Current assets
   Cash and cash equivalents                      $   363,833  $   235,450
   Short-term investments                              58,089       60,871
   Accounts receivable, net                           222,103      223,960
   Inventories                                        212,330      190,538
   Deferred income taxes                               18,868       20,955
   Other current assets                                35,689       21,428
                                                  -----------  -----------
       Total current assets                           910,912      753,202

   Long-term investments                              133,701      101,332
   Property, plant and equipment, net                  72,635       68,140
   Deferred income taxes                                5,364        4,363
   Other assets                                        15,311       15,173
                                                  -----------  -----------
          Total assets                            $ 1,137,923  $   942,210
                                                  ===========  ===========

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Accounts payable                               $    65,334  $    53,529
   Accrued expenses and other current liabilities      35,393       46,739
   Deferred revenue                                    58,079       46,707
   Income taxes payable                                10,924        7,476
   Product warranty                                    12,284        8,627
                                                  -----------  -----------
       Total current liabilities                      182,014      163,078

   Long-term accrued expenses and other long-term
    liabilities                                        91,106       81,130
                                                  -----------  -----------
          Total liabilities                           273,120      244,208

Stockholders' equity
   Common stock                                           978          958
   Capital in excess of par value                     709,273      654,458
   Less: Cost of treasury stock                      (776,938)    (732,859)
   Retained earnings                                  929,832      775,635
   Accumulated other comprehensive income (loss)        1,658         (190)
                                                  -----------  -----------
       Total stockholders' equity                     864,803      698,002
                                                  -----------  -----------
           Total liabilities and stockholders'
            equity                                $ 1,137,923  $   942,210
                                                  ===========  ===========

Contact Information

  • Contacts:
    Bob Halliday
    Executive Vice President and
    Chief Financial Officer
    978.282.7597
    or
    Tom Baker
    Vice President, Finance
    978.282.2301